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Rating:A Chi-Town Boutique Hunts For Small Cap Shops Not Rated 5.0 Email Routing List Email & Route  Print Print
Thursday, June 22, 2017

A Chi-Town Boutique Hunts For Small Cap Shops

Reported by Sophie Alexander

Mike Corbett, CEO and majority owner of Chicago-based Perritt Capital Management, is looking for acquisitions to grow his firm. Corbett tells MFWire that although he is open to a wide variety of deals, he is mostly looking to adopt small or micro cap mutual funds from smaller firms who are having trouble staying afloat.

Michael Corbett
Perritt Capital Management
CEO
"Passive managers have been strong for a long period of time but I think a lot of active managers are struggling and they might be looking to explore alternatives for their business," Corbett says.

Corbett adds that he has had many conversations with other firms about adopting funds and merging assets into existing funds. One firm even wanted to acquire Perritt, but Corbett says he is not interested in selling. If Perritt were to adopt a fund, Corbett says he is open to keeping the old firm on as a subadvisor or taking over the management of the fund altogether.

In addition to helping other firms, Corbett says acquisitions are good opportunities for Perritt to grow.

"The mutual fund industry hasn't grown for the last several years and if you're not growing it's gonna be tough to survive, so I think you have to think this way," Corbett says.

Perritt currently has three funds and nearly $350 million in AUM. Corbett says the firm could nearly double its AUM without needing to expand their 12-person team. He says Perritt is open to adopting funds with AUM anywhere from $20 million to $400 million.

"Financially and structure wise we have the ability to help other firms. We still have plenty of capacity to grow," Corbett says.

Corbett does say that if they do grow enough, hiring is certainly possible.

Perritt is working internally and with Sondhelm Partners, an Alexandria, Virginia-based firm that grows asset managers and mutual funds, to support this process. Going forward, he says Perritt wants to take it one deal at a time over the coming years.  

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